Type 2 diabetes is associated with (and possibly caused by) defects in pancreatic β-cell mass and function. β cells of diabetics show a blunted and mistimed response to a glucose challenge. Moreover, unlike insulin resistance, which appears to remain relatively constant during the development of diabetes, β-cell function steeply deteriorates with time in a manner that is impervious to, and possibly worsened by, existing treatments. This occurs despite the fact that reversal of hyperglycemia can partly restore β-cell function, even in patients with advanced disease, hence the clinical conundrum of what is to be done to treat β-cell dysfunction. Treatments range from preserving β-cell function by reducing the metabolic demand on the β cells, to increasing β-cell performance and mass to meet the increased metabolic demand. Despite these efforts, it is still unclear whether the two primary components of β-cell failure, impaired insulin secretion and reduced β-cell mass, are mechanistically linked. Thus, understanding the mechanism linking these twin abnormalities can provide clues as to the best therapeutic approach to β-cell failure. Many cellular biological mechanisms and potential drug targets have been identified and postulated to play a role, either central or supportive, in β-cell dysfunction. Recently, in studies of FOXO1-deficient β cells, Applicant reported that β-cell dedifferentiation, rather than apoptosis, is a mechanism of β-cell dysfunction that can lead to new ways to intervene in the treatment of diabetes.